Journal of Business Administration

APPLICATION OF ARBITRAGE PRICING THEORY IN DHAKA STOCK EXCHANGE

Syeda Mahrufa Bashar

Fairuz Chowdhury

Jubairul Islam Shaown

Abstract

The study aims to measure the applicability of the Arbitrage Pricing Theory (APT) in predicting the stock returns of different companies across ten industries in Dhaka Stock Exchange. In this model, three macro-economic factors, namely gross domestic product, inflation, and interest rate were used as independent variables. Stock return data were collected for 218 companies across 10 different industries. According to the study findings, the selected independent variables are not able to explain the variability in the stock returns of the selected companies. Thus, APT model is not effective in predicting the stock returns of the companies listed on DSE. This non-predictability was found in the case of all the selected ten industries.

Keywords: APT, CAPM, DSE, GDP, Inflation, Interest Rate, Stock Return

ASSESSMENT OF FACTORS CONTRIBUTING TO ADOPTION OF MOBILE FINANCIAL SERVICES: A PERSPECTIVE OF BANGLADESH

Zakaria Arifin

Md. Iftekharul Amin

Mohammed Shafiul Alam Khan

Abstract

Due to the unimaginable advancement and transformation in the mode of communications, traditional payment methods are becoming obsolete and going to be replaced by mobile payment apps as a smart medium of choice for financial transactions among the people. The aim of this study is to assess the impact of drivers and inhibitors of adoption confirmation of mobile financial services (MFS) and its continuance intentions with positive brand attitude. The study was conducted taking of participants from different occupations and divisions of the country using Stratified Sampling method. Moreover, the study also examined the moderating role of income, rural-urban resident status, and use frequency of MFS to observe significant differences of the impacts in adoption confirmation and continuance intentions. Further, the relationship was tested with the mediated moderating effect of perceived risk of MFS. The study results revealed that MFS users’ value perception, ease of use and reduced risk of MFS lead to customer satisfaction. However, users’ risk perception negatively affects adoption confirmation of MFS. The results also show that the relationships are significantly different among respondent with different income group, rural-urban residence status, and low use frequency of MFS. However, the relationships are nullified with the mediated moderating effect of perceived risk of MFS. Future research can be done considering other dimensions of MFS such as - convenience, knowledge ability, compatibility, etc. alongside the framework under this study.

Keywords: Adoption Confirmation, Continuance Intentions, Perceived Risk, Positive Brand Attitude, Value Perception

DOES GENDER DIVERSITY IN CORPORATE BOARDS PAY OFF? A STUDY ON THE BANKING SECTOR OF BANGLADESH

Shakila Yasmin

Ireen Akhter

Abstract

The objective of this research is to examine whether gender diversity in the boards of directors results in better financial performances of the banks in Bangladesh. In light of agency theory and resource dependency theory, board gender diversity should have positive influence on firm performance. However, empirical researches on the issue have provided perplexing results. Hence further investigation is worth exploring. Unlike past empirical works, this study has broken down firm profitability using DuPont’s identity to investigate different aspects of financial performance; such as efficiency and risk-taking behavior. Data were collected from 5 year (2013-2018) annual reports of the all commercial banks listed in Dhaka Stock Exchange. Simple descriptive, correlation and linear regression analysis were done to examine the role of board gender diversity on firm performance. The results of correlation and regression analysis do not demonstrate any significant association between board gender diversity and the measures of profitability, asset utilization efficiency and financial leverage, which is contrasting to the broadly held belief of the proponents of the board gender diversity agenda. Perhaps, gender stereo type, tokenism, suboptimal decision process, female directors’ background and recruitment process can explain such contrasting results. The study therefore should entice practitioners and future researchers to dig deep into the reasons of getting such contrasting results.

Keywords : Board Gender Diversity, Commercial Banks, Financial Performance

ETHICAL LEADERSHIP FOR SUSTAINABILITY IN THE ERA OF TECHNOLOGY

Sutapa Bhattacharjee

Jubairul Islam Shaown

Abstract

The study aims to explore the importance of ethical leadership in the modern era of technology. In today’s neoliberal world of globalization, financialization, and search for numerical flexibility, organizations are resorting to numerous technological innovations of the second machine age to extract as much surplus value as possible from the workers or employees. To do so, leaders are often engaging in numerous forms of unethical practices. In the given context, the study aims to explore how unethical leadership practices in this technological era ultimately affects the sustainability of the organization. The study is based on secondary data, going through studies from multiple disciplines (ethics, technology, and leadership) to draw a congruent and wholesome picture of the research topic. The current research finds out that in all the sectors, unethical practice by leaders to generate higher profit has been documented in various parts of the world. The major unethical practice done through the use of technology are profiling candidates on social media, monitoring of employees within and beyond the organizational boundaries, misclassification of employees as independent contractors, and algorithmic control. While such practices may boost profit in the short run, in the long-run majority of these organizations are suffering in numerous ways such as legal case filings by the employees, naming and shaming by the general public against the unethical practices, lower productivity, operational and financial distress, and reputational damage. The study suggests that looking at the long run picture, managers should make ethical use of technological advancements and consider both the social and technical aspects of a system to ensure equitable distribution of the surplus value.

Keywords: Ethics, Gig Economy, Leadership, Profiling, Sustainability, Technology

HOW DOES DIGITIZATION IMPACT ON THE FORMATION OF BANGLADESHI LEARNERS’ INTERPERSONAL SKILLS?

Farheen Hassan

Md. Mohiuddin

Md. Khaled Amin

Abstract

The study envisages as certaining whether the initiatives embraced by Higher Education Institutions (HEIs) have impact on the formation of the interpersonal skills among the learners in Bangladesh or not. Considering cross sectional approach as research method and incorporating self-administered questionnaire as research instruments, a total of one hundred respondents (i.e. students and educators), chosen by the judgement of the researchers, from sixteen HEIs of Bangladesh were surveyed. The survey data were analyzed through a structured equation modeling simulation, namely SMART PLS 2.0. At first, all scales, which were adopted from prior studies and reworded to fit into the context, were validated using the standard indicators followed by the process of testing hypotheses. Empirical evidence revealed that behavioral factors: interactivity, collaboration, self-efficacy impacted positively on the development of learners’ interpersonal skills, such as teamwork, critical thinking, problem solving, and persuasion. However, the study also found some factors: cost, lack of training facility, poor infrastructure, high level of plagiarism, and lack of motivation, which were manifested as obstacles to digital transformation in HEIs in Bangladesh. Result of the study may provide educators and policy makers with a solid base for setting up e-learning within the institution and explore the main areas of improvement that should be taken into consideration. The study has also contributed to the existing literature unfolding behavior related to the development of professional skills.

Keywords: Digitization, Distance Learning, Education Technology, HEIs, Interpersonal Skills

IMPACT OF BRAND ON ONLINE PURCHASE DECISION: A STUDY ON BUYERS IN DHAKA CITY

Swarup Saha

Avijit Mallik

Abstract

The recent surge in online shopping arises a need for a study on the factors that influence the online purchase decision. This paper aims to assess the impact of brand in online purchase decision of consumers in Dhaka city. With this aim in mind, a survey was conducted among 171 online shoppers from Dhaka city through a questionnaire. The impact of demographic factors, brand related factors, and non-brand related factors on online purchase behavior has been examined. It has been found that among the demographic variables, gender has an impact on the variety of purchased product. Male shoppers prefer to buy electronic gadgets, tickets and clothes, whereas females mostly buy clothes and cosmetics in online. Further, this study has found out that average spending of females is higher than that of males. The factor analysis reveals that Brand Image consisting of factors- Well Known Brand, Brand Trust, Brand Loyalty, and Perceived Quality- has significant impact on the online purchase decision. Factors under Price and promotion and website quality have moderate influence on online purchase decision. Finally, the study paves the way of further research on other factors that impact the online shopping behavior and provides insights for online sellers to design their branding initiative in an effective and efficient way.

Keywords: Brand Image, Online Purchase Decision, Price, Promotion, Website Navigation

IMPACT OF OWNERSHIP STRUCTURE ON CAPITAL STRUCTURE DECISIONS: EVIDENCE FROM BANGLADESHI LISTED COMPANIES

Tanisha Bukth

Melita Mehjabeen

Abstract

This study seeks to examine the impact of ownership structure on the capital structure decisions of firms in an emerging market economy. Our sample consists of 792 firm-year observations drawn from non-financial firms listed in the Dhaka Stock Exchange, Bangladesh, and spans the period from 2010 to 2018. We define capital structure by the ratio of total debt to total assets and measure ownership identity as the percentage of shares attributable to six categories of shareholders. These include family owners, managerial owners, state owners, institutional owners, individual owners and foreign owners. Using pooled OLS regression and controlling for a number of governance and firm-specific variables, we find that family ownership, managerial ownership and state ownership each has a positive and significant influence on leverage. We propose that while state-owned businesses may be utilizing more debt due to their greater ability to access finance and to withstand financial distress, the propensity of family owners and managerial owners towards debt may be explained in terms of their desire to avoid the dilution of equity and/or their desire to maximize firm value. However, we also question whether the institutional voids in Bangladesh make debt a convenient financing option and whether this, in fact, leads family owners and managerial owners to opportunistically take on more debt, without adequate regard to its impact on the value of the firm.

Keywords: Bangladesh, Capital Structure, Emerging Market, Leverage, Ownership Structures, Pecking Order Theory, Trade Off Theory

INFORMATION SYSTEMS AND THE SOCIAL THEORY OF THE FIRM

Mehdi Hussain

Md. Rezaul Kabir

Nastaran Nazrul Tui

Abstract

Researchers in information systems have attempted to tease out the role of IS in producing inter-firm performance heterogeneities. In this paper, we evaluate the discussion with special emphasis on “rents”. We make a case that if a firm achieves performance differentials through efficiency (Ricardian) or innovation (Schumpeterian) rents, it is compatible with social welfare concerns, but when it seeks monopoly rents, it has an adverse effect on social welfare. From a theoretical standpoint, we feel that the incorporation by IS scholars of issues of social welfare into the theory of the firm will invest it with greater explanatory power. Such a “social theory of the firm” does not come at the expense of economic performance, but rather overlays it with issues of social welfare, so as to prevent theories of the firms from becoming divorced from broader concerns.

Keywords: Corporate Performance, Dynamic-Capabilities-Based View, Economic Welfare, Industrial Organizational View, Rent, Social Welfare

A SEVEN-STEP (7Q) MODEL FOR EXPLORING PHILOSOPHICAL UNDERPINNINGS IN RESEARCH METHODOLOGY: IMPLICATIONS FOR DOCTORAL RESEARCH IN SOCIAL SCIENCE

Md. Rezaul Kabir

Md. Mamin Ullah

ABSTRACT

Research philosophy exerts significant influence on research approaches, strategies and methodologies. The philosophical stance of a researcher, especially in doctoral studies, justifies the validity of final research outcomes. An in-depth understanding of the philosophical assumptions enables a doctoral researcher to craft a comprehensive research plan ranging from research questions to appropriate method of data analysis. This paper proposes a seven step model for exploring philosophical underpinnings in doctoral research, particularly for social science research area. The model is based on seven basic questions that a researcher must answer to build up a connection between research question and research method in more concrete manner. Implications of the model for doctoral research are outlined in the paper. Being one of very few studies focusing on philosophical understandings from doctoral studies perspective, this study is expected to benefit academics, novice researchers, post-graduate students, and more importantly the doctoral students to a large extent.

Key Words:

7Q Model, Doctoral Research, Research Philosophy, Research Methodology, Research Paradigms, Social Science Research.

CAPITAL STRUCTURE DETERMINANTS OF THE FOOD AND ALLIED INDUSTRY - AN EMPIRICAL STUDY IN BANGLADESH

A. T. M. Jakaria Khan

Md. Mohiuddin

Abdullah Atique

ABSTRACT

The purpose of this paper is to identify the determinants of capital structure in the food and allied industry of Bangladesh. Eight independent variables – Firm Size, Profitability, Liquidity, Tangibility, Operational Ability, Sales Growth, Tax Shield, and Earnings Volatility were identified through literature review and their significance as determinants of Firm Leverage was tested using Regression Analysis. 14 companies listed in the Dhaka Stock Exchange under the Food and Allied sector were analyzed using data from a 5 year period. Liquidity, Tangibility, and Tax Shield were found to be significant variables and all three had negative relationship with leverage. Using Pearson’s Correlation analysis, only Liquidity and Profitability were found to be significantly correlated to Leverage. The findings of the study were also compared with the predictions of the Pecking Order Hypothesis and the Trade-off Theory. Some of these findings were consistent with the Trade-off Theory, while others supported the Pecking Order theory. The causes of these inconsistencies were beyond the scope of this study and further research is recommended on this topic. This study should serve as a starting point for future researchers and as a reference point for policymakers, financial managers, and investors involved in the food and allied industry of Bangladesh.

Key Words:

Capital Structure, Dhaka Stock Exchange, Food and Allied Industry of Bangladesh, Pecking Order Theory, Trade Off Theory.

CORPORATE SCENARIO ANALYSIS OF PHYSICALLY CHALLENGED HUMAN RESOURCES IN BANGLADESH

Sahin Akter Sarker

ABSTRACT

The issue of job opportunities and welfare of marginalized section of society is an important area of Human Resource Management. Physically Challenged Persons (PCPs) is marginalized in developing countries including Bangladesh. One of the prerogatives of Human Resource Management Department (HRMD) or Human Resource Administration Department (HRAD) is to look after the welfare of PCPs. HRM has long been advocated by national administration in Bangladesh. This study aims to investigate the functioning of HRAD in the sphere of PCPs with the help of primary survey data of Bangladeshi companies. An extensive company survey is made in and around the capital city Dhaka where headquarters of the major companies are located. Public and private organizations including the Multinational and NGOs are covered in the survey. The findings of the survey highlight moderate penetration of HRAD in Bangladesh company sector. However, unfavorable attitude of employing physically challenged persons (PCPs) has been observed. Physically challenged persons are not recruited over the last five years (2011 – 2015). ‘Human Resource Administration Department’ (HRAD) failed to address issues of physically challenged person at the time of staff selection. Hence, involvement of HRAD in the sphere of PCPs needs improvement. This study will help the future researchers to come up with further investigation which could help this vulnerable group.

Key Words:

Human Resource Management (HRM), Human Resource Administration Department (HRAD), Marginalized Segment of the Society, Physically Challenged Persons (PCPs).

INTERNATIONAL CAPITAL MOBILITY: THE FELDSTEIN-HORIOKA PUZZLE

Ummul Hasanath Ruthbah

ABSTRACT

In an attempt to determine the openness of the OECD countries Feldstein and Horioka (1980) estimate the correlation between savings and investment for the period of 1960-1974 and find a very high correlation between these two variables. This result gave rise to a large amount of literature because it was not compatible with the hypothesis of perfect capital mobility and was termed the "Feldstein-Horioka puzzle". Controlling for net asset position of countries and using an instrumental variable approach this paper confirms the fact that capital was not that mobile in the 1960s and mobility has increased gradually. The paper finds that time variation in data has significant effects on the coefficients and produces more logical results than the Feldstein-Horioka ones.

Key Words:

Feldstein-Horioka Model, International Capital Mobility, OECD Country, Portfolio Theory.

MACROECONOMIC VARIABLES AND STOCK MARKET RETURN: A STUDY ON DHAKA STOCK EXCHANGE (DSE)

Mohammad Saif Noman Khan

Nahid Rahman

Aumit Ahsan

ABSTRACT

As an important part of capital market and as arguably one of the most impactful components of the entire financial system, the stock market is a substantial indicator of macroeconomic performance. Indeed, an understanding of the relationship between different macroeconomic variables and stock market performance forms the basis of any predictive or analytical model aiming to aid investors and policy makers alike. In this paper we examine this relationship for Bangladesh’s principal stock exchange i.e., the Dhaka Stock Exchange (DSE) by linking the broad market index with a set of macroeconomic variables. Using multiple regression models in multiple iterations we find that inflation, exchange rate and bank deposit rates were significant influencing variables behind stock market movements. Such findings are in line with empirical evidence from other emerging and developed markets and help to affirm an existing body of literature dealing with the relationship between market movements and macroeconomic variables.

Key Words:

Bank Deposit Rates, Dhaka Stock Exchange, DSE, DSE Broad Index, Exchange Rate, Foreign Reserves, Inflation, Interest, Macroeconomic Impact, Stock Market Movements.

MEN AS PARTNERS OF POSITIVE CHANGE: MASCULINITIES AND WOMEN’S ACCESS TO BUSINESS OPPORTUNITIES IN BANGLADESH

Sayed Saikh Imtiaz

Md. Iftekharul Amin

Md. Sazzad Hossain, PhD

ABSTRACT

Men can play effective role as partners of positive change in terms of women’s access to business opportunities and women empowerment in Bangladesh. This research paper intends to explore and understand how men as well as masculinities can contribute towards women’s access to business opportunities in Bangladesh. In fact, men’s engagement is very significant for meaningful and effective women empowerment. This study has used a mixed method approach of quantitative and qualitative methods with focus group discussions and in-depth interviews. The study finds that there are a notable number of men in Bangladesh who have supported women empowerment in the context of gaining access to business entrepreneurship. The study presents that men can contribute in diminishing unequal power relations in terms of economic opportunities through gaining proper access to business opportunities. The study concludes that men can truly become active agents and partners of positive change for women’s empowerment through women’s access to business opportunities. The paper espouses that there is a potential scope for developing a model in order to bring the positive masculinities into action for women’s empowerment through access to business opportunities.

Key Words:

Bangladesh, Business Opportunities, Masculinity, Women Empowerment.

PUBLIC SECTOR ASSETS AND LIABILITIES: ACCOUNTING AND GOVERNANCE

Dhiman Chowdhury

ABSTRACT

Accounting and governance of public sector assets and liabilities is getting increasing attention around the world. Our various government service charges are much lower compared to even our neighbors. International Federation of Accountants has issued international public sector accounting standards (IPSAS) in 2004 for national, regional, local governments and related government agencies. In UK and other advanced countries, these organizations prepare balance sheet and other corporate sector like financial statements. Our government agencies like NBR and CAG do not prepare balance sheet and other financial statements. There are worldwide cries for increasing tax revenue for increasing government assets but our tax revenue is one of the lowest in the world. Contributory provident fund is replacing free employer-provided defined benefit pension benefits around the world but our government pension is one of the highest in the world. There had been increasing privatization and reform of loss-making SOEs for decreasing government deficit. Our ministries do not publish annual reports regularly and can be improved in line with the corporate sector. Similarly, the Secretary’s report unlike his counterpart in the corporate sector is just a thanks giving seven lines statement giving no information about his ministry. And finally, independent nonexecutives in the Boards help better protection and efficient utilization of organization resources around the world but our ministries and government agencies do not have a single nonexecutive.

Key Words:

Accounting, Assets, Governance, Liabilities, Public Sector, Reporting.

SPILLOVER EFFECTS OF FOREIGN EXCHANGE RESERVES (FER) ACCUMULATION IN BANGLADESH: A VECTOR AUTOREGRESSION APPROACH

Melita Mehjabeen

Saidul Islam

ABSTRACT

The different financial crises over the world in the recent past have affected the level of reserves in many Emerging Market and Developing Countries (EMDC). Being mindful of repercussions of the back-to-back financial crisis in the nineties on the external sector front, Bangladesh has accentuated Foreign Exchange Reserves (FER) accumulation since the early 2000s. This paper explores the implications of such accumulation on the macroeconomic variables notably economic growth, inflation and exchange rate using a simple 4-variate Vector Autoregression (VAR) model during the period 1973-2017. Surprisingly, the estimate suggests that FER neither leads to higher economic growth nor spurs inflation in Bangladesh. However, disregarding the economic logic, the FER accumulation causes exchange rate appreciation during the period studied. The findings suggest that Bangladesh could not capitalize on the ample FER to enhance economic growth following an export-led growth strategy. But the country had been successful in containing potential inflationary pressures through prudent sterilization operations.

Key Wards:

Foreign Exchange Reserves, Economic Growth, Inflation, Exchange Rate, Developing Countries.

VALUE CHAIN INEFFICIENCIES AND MARKET FAILURES IN THE AGRICULTURAL SECTOR OF BANGLADESH: A CASE STUDY

Sheikh Morshed Jahan

Mushtaque Ahmed

Syeda Farzana Morshed

ABSTRACT

Though Bangladesh has achieved remarkable success in agricultural productivity over the past four decades or so, its agricultural production, postharvest management and marketing practices are far from being efficient and beneficial for farmers and consumers. This study on agricultural value chain identifies the areas of inefficiencies in different value segments and reveals failures in the market ecosystem. To address the failures and inefficiencies, this paper proposes three generic strategic courses of action around the domains of Triple Triangle Framework. The paper is expected to benefit the researchers, extension officials, policy makers and market development professionals involved in agriculture, food and nutrition security, and inclusive and sustainable development.

Key Words:

Agriculture and Agribusiness, Bangladesh, Market Ecosystem, Market Failure, Sustainable Development, Value Chain.

ANALYZING THE LOYALTY PROGRAMS OF THE TELCO INDUSTRY OF BANGLADESH

Sadia Farjana

Md. Iftekharul Amin

Mohammed Shafiul Alam Khan

ABSTRACT

The telecommunication industry in Bangladesh, though ever-expanding in terms of market size and product bucket; unfortunately, and ironically – lagging a lot to acknowledge the impact and significance of loyalty program to retain and create loyal customer base. Grameenphone, the market leader and pioneer in the industry, launched the first telco loyalty program and till date, their “GP STAR” is the most popular and structured loyalty program. Banglalink, the now third key player in the industry introduced their loyalty program “Priyojon” next with a huge buzz in the market indicating a promising journey in loyalty segment; but nevertheless, failed to uphold its consistency. Robi, the current second largest Telco operator, launched its loyalty program “Dhonnobad” last in the industry after 17 years of the company’s business commencement in Bangladesh, and still this program is in budding phase. This paper aims to present a comprehensive study on the Telco industry’s loyalty programs, their current context such as offerings, initiatives, eligibility matrix, market presence, customer perception etc. and also to demonstrate a comparative analysis among the operators’ loyalty programs. Furthermore, the paper also tries to find out if there remains any gap between the loyalty programs’ framework and customers’ expectation. Operators are investing in bulks in their loyalty programs to attract new customers and retain existing customer base, but investment is going in vain due to lack of sustainable planning and efforts. Despite its current unappealing form, loyalty programs have a plethora of opportunities to offer and customers still have much expectation from their operators.

Key Words:

Discount, Loyalty Program, Partnership, Point Redeem, Telecommunication, Tier Eligibility.

BANK COMPANY AMENDMENT BILL 2018 AND ITS IMPACT ON THE BANKING SECTOR IN BANGLADESH

Fatema-Tuz-Zohra

Melita Mehjabeen

Tanzina Haque

ABSTRACT

Banking sector in Bangladesh, since port liberation phase, has been a crucial element to develop the financial system of Bangladesh in order to run the economic process smoothly. A number of reforms in the financial sector including regulatory reforms has been undertaken by the government. After the introduction of Bank Company Act 1991, the regulation process of Bangladesh Bank and the performance of banking sector was stabilized for some time. However, the current phase of banking sector is more vulnerable than before. Frequent changes and amendments of banking law, several banking defaults, scams and scandals and weaker regulatory authorities are the primary causes of recent vulnerability in the sector. This study is primarily done to compare the Bank Company Act of 1991 in light of the Bank Company Amendment Bill 2018. Three major changes have taken place in this amendment, which are mainly related to the composition of board of directors and their tenure. Through this study, extensive focus is given on how this amendment would have an impact on the banking sector of Bangladesh in terms of performance of the banks, practice of effective corporate governance and interests of other stakeholders. The factors are analyzed and carefully presented to give an overall idea of the vulnerability that the banking sector could face in the upcoming years.

Key Words:

Bank Amendment Bill, Board Composition, Corporate Governance, Risk.

FUNDAMENTAL FACTORS IN EQUITY INVESTMENT DECISION: EVIDENCE FROM DHAKA STOCK EXCHANGE LTD.

Tasneema Afrin

Mohammad Saif Noman Khan

Imran Ahmed

ABSTRACT

The aim of this study is to identify the fundamental factors that individual investors rely on while investing in the share listed on Dhaka Stock Exchange (DSE) Limited, and to inspect whether there are statistically significant differences in the factors across the demographic characteristics of the respondents. In order to achieve the objectives, data collection has been done from a sample of 62 individual investors of DSE using structured questionnaire survey through convenience sampling. Data is analyzed using numerous statistical tools in IBM SPSS and R software, namely descriptive statistics, reliability analysis, factor analysis and one-way ANOVA tests. The findings of the study show that the fundamental factors in equity investment in DSE are Accounting Information, Stock Characteristics, market Factors and Company Attributes. The findings further shed light on the fact that none of the above factors experience statistically significant changes with respect to demographic characteristics of age, income level and education level.

Key Words:

Accounting Information, Company Attributes, Hedging Criterion, Market Factors, Portfolio Diversification, Stock Characteristics.

INCLUSIVE GROWTH THROUGH FINANCIAL INCLUSION OF DIGITAL FINANCIAL SERVICES: BANGLADESH PERSPECTIVE

Reefath Zaman Shourov

Md. Mohiuddin

Rezwanul Huque Khan

ABSTRACT

Bangladesh, a country of emerging economy, is one of the most densely populated countries in the world. Though a rapid pace of economic growth has been observed in this country for the last couple of years, 25% of the adult population is still financially excluded. Financial exclusion of a significant portion of the population is hindrance to the country’s economic growth, especially for inclusive growth. Digital financial services (DFS) can be considered as one of the major financial solutions for improving financial inclusion. This paper investigates in determining the measures to establish a sustainable DFS ecosystem and to build consumer demand for DFS. All the possible micro and macro-economic variables, along with the existing regulations, have been studied for this purpose. The study, which is qualitative in nature, uses various country experiences, interviews, expert opinions and case study as the key research methods. Furthermore, a thorough review of literatures has also been conducted as an aid to recommend an effective solution to establish a sustainable DFS ecosystem and to build consumer demand for DFS. The study argues that it is not enough to simply depend on the financial regulators to create framework for DFS. The consumer demand must be understood and catered to; because the focus should be on pull strategy that covers understanding and building the customer demand for Digital Financial Services (DFS). This will drive the mass people to be included in the DFS channels by their own, recognizing the benefits of DFS given their demand being catered to. This, in turn, will result in financial inclusion as well. Also, there should be proper DFS ecosystem created after properly analyzing the variables that affect it. Thus, inclusive economic growth can be achieved. Further studies can be carried out to ensure a secured and convenient payment mechanism through DFS which will help gaining financial inclusion; to gauge the effectiveness and impact of DFS on financial inclusion; and to measure how financial literacy may help achieving financial inclusion through DFS.

Key Words:

Consumer Demand, Digital Financial Service (DFS), Financial Inclusion,  Mobile Financial Services (MFS), Risk.

SELECTION CRITERIA AND BEHAVIORAL BIASES INFLUENCING THE ADOPTION OF ISLAMIC BANKING IN BANGLADESH

TANISHA BUKTH

S. S. M. Sadrul Huda

ABSTRACT

Islamic banking is a mainstay of Bangladesh’s financial system, accounting for over 23% of bank credits and deposits. Since Islamic finance has its origin in faith, decisions to adopt Islamic banking might have normative dimensions, representing a convergence with behavioral finance. The aim of this study was to compare the selection criteria used by customers adopting Islamic banking in Bangladesh with those adopting conventional banking to assess whether behavioral biases influence this choice. The results, as derived from a questionnaire survey of 250 individuals, indicate that the ‘framing effect’, whereby Islamic banking is labeled more ethical owing to its faith-premium does create a bias towards it. However, religiosity, despite its greater significance to those who choose Islamic banking, is not sufficient as a selection criterion, as it is surpassed by reliability of banking service and customer-friendliness for both patrons and non-patrons. The study points to the negative impact of the ‘availability bias’ on adoption of Islamic banking, thus highlighting the importance of knowledge-creation regarding Shariah-based banking principles and the Islamic banking stream’s adherence to the same. However, no distinct impact is found to be exerted by the status quo bias and subjective norms on the inclination towards Islamic banking.

Key Words:

Availability Bias, Bangladesh, Behavioral Biases, Framing Effect, Islamic Banking, Selection Criteria.

TEST OF WEAK-FORM EFFICIENCY OF DHAKA STOCK EXCHANGE: EVIDENCE FROM FOOD & ALLIED AND CERAMICS SECTORS OF BANGLADESH

Swarup Saha

Avijit Mallik

Sutapa Bhattacharjee

ABSTRACT

Efficiency of stock market has been the interest of many researchers for years. Though comparatively small, the economy of Bangladesh is emerging which is reflected by important parameters such as GDP & export growth rate, per capita income, foreign reserve etc. yet, the capital market is efficient or not has been a concern for the stakeholders. The objective of this paper is to test the market efficiency of Dhaka Stoc Exchange (DSE) with further focus into the efficiency of Food & Allied and Ceramics sector to examine the weak-form efficiency at industry level followed by the share market crash in 2010. For this purpose, data have been analyzed for the period of January 1, 2011 to December 31, 2017. The paper used Run test, Shapiro Wilk normality test and Shapiro Franca normality test, ADF unit-root test and Phillips-Perron unit-root test to assess the weak form efficiency. The results of Run test show that although DSE is not even weak form efficient, all the companies under ceramics sector and some of the companies under the Food & Allied sector show weak-form efficiency. However, other non-parametric tests and Unit-root rests nullify the findings of Run test. Thus, the paper concludes that after the crash in 2010, the market efficiency at industry level doesn’t show any sign of weak-form efficiency.

Key Words:

ADF-PP Test, Ceramics, DGEN, DSE, DSEX, Efficient, Market Hypothesis, Food & Allied, Run Test, Weak-Form Efficiency.

A COMPARATIVE STUDY BETWEEN THE PROFIT RATES OF ISLAMIC BANKS AND THE FIXED LENDING RATES OF REGULAR COMMERCIAL BANKS IN BANGLADESH

Syeda Mahrufa Bashar

Jubairul Islam Shaown

ABSTRACT

The purpose of this study research is to look into the profit rates offered by the Islamic Shariah based banks currently operating in Bangladesh as well as the interest rates of local commercial, conventional, foreign commercial, and state owned banks in Bangladesh in order to measure the quality and performance of the Islamic banks against the latter category of banks. The time period taken for these particular analyses is between the years 2012 to 2017 (till June). In this research paper, the researchers have sampled around 8976 observations both consisting of the Islamic banks and the other types of banks which include term loans of different maturity offered up to small, medium and large scale industries, trade financing to export oriented industries, housing loans, car loans, consumer credit to Non-banking Financial Institutions and so on. Emphasis were given to higher number of observations in order to cover as much loan classes as possible for all the banking models involved. Comparative analysis based on statistical formulas were carried out with the main purpose of investigating the existence of any level of difference between the profit rates of the Islamic banks and the fixed lending rates of local commercial banks, foreign commercial banks and state owned

Key Words:

Achievement, Business Graduate, Employability, Job Attractiveness, Quality, Salary, Work Environment.

ENTREPRENEURIAL INTENTION OF URBAN AND RURAL WOMEN ENTREPRENEURS OF BANGLADESH

Ireen Akhter

Shakila Yasmin

Syeda Ilfat Abedin

 ABSTRACT

This paper investigates whether urban and rural female entrepreneurs are different in terms of the factors of entrepreneurial intention. Three factors mentioned in Shapero’s Model of entrepreneurial intention i.e. perceived feasibility, perceived desirability and propensity to act has been considered in this study. Both secondary and primary data are used for the study. Secondary data from literature review helped building theoretical base and hypotheses of the study. Primary data were collected through key informant interview and structured questionnaire survey. Responses were collected from 64 rural and 42 urban women entrepreneurs. Cross tabulation, independent sample t-test and general descriptive statistics are used for data analysis. Results indicate that there is no urban-rural difference in terms of perceived feasibility and propensity to act. However, perceived desirability is higher among urban female entrepreneurs.

Key Words:

Entrepreneurial Intention, Female Entrepreneurs, Rural-Urban, Shapero’s Model.

ETHICAL PRACTICES IN THE GLOBAL MARKET OF READY-MADE GARMENTS INDUSTRY: A CONCEPTUAL STUDY FROM THE VIEWPOINT OF BANGLADESH

Dr. Carmen Z. Lamagna

Sabrina Rahman

ABSTRACT

This conceptual study aims to discover the extent of ethical practices adopted by the ready-made garments (RMG) sector in Bangladesh. By reviewing existing literature focusing on developing countries, the authors endeavored to analyze the prevalent working conditions and practices of the RMG factories, also known as sweatshops, in emerging economies like Bangladesh from the perspective of five major fundamentals of ethical practices. Furthermore, the paper attempted to identify the possible obstacles hindering the adoption of ethical practices to ensure fair treatment to the garments workers. After conducting a qualitative analysis, this paper has identified lack of secured work environment, exploitation of child labor, insufficient incentives from the influential stakeholders and inadequate human resource development initiatives as the key existing hindrances to the development of the RMG sector in Bangladesh. Moreover, the prevalence of ethical concepts like cultural relativism and consequentialism has also been identified as crucial factor of provoking unethical practices and unfair treatments towards the underprivileged workers. The paper has put forward some recommendations such as promoting concepts like ethical fashion and consumer citizenship and implementing ethical theories of non-consequentialism and natural law to abolish destructive trends like fast fashion.

Key Words:

Challenges, Ethical Concepts, Ethical Practices, Garments in Bangladesh, RMG Sector, Sweatshops.

FIRM SPECIFIC FACTORS AFFECTING THE PROFITABILITY OF GENERAL INSURANCE COMPANIES OF BANGLADESH: A PANEL DATA ANALYSIS

Avijit Mallik

Swarup Saha

A T M Jakaria Khan

ABSTRACT

Insurance companies play a vital role by distributing and transferring the risk in any economy. Therefore the sustainability of this industry is critical and the stability of earnings is one of the pre-conditions to survive and grow in the long run for any sector. Keeping the importance of profitability in mind, this paper investigates the firm specific factors that affect the profitability of general insurance companies of Bangladesh. To achieve the objective, quantitative approach was applied on a sample of 13 listed general insurance companies of Bangladesh for 2005 to 2014. Return on Asset (ROA) was considered as proxy for profitability; size, age, premium growth, solvency, investment ratio and loss ratio were considered as firm specific variables affecting the profitability of general insurance companies. Considering the nature of data, correlated panels corrected standard errors (PCSEs) was applied to test the research hypothesis. The findings of this paper show that size of the firms, investment ratio and loss ratio were statistically significant at 10% level. While age, size, loss ratio show negative relationship with profitability, solvency, investment ratio and premium growth show positive relationship with profitability. The results show that large firms may not always earn better return as the firms may face diseconomies of scale. On the other hand, small firms earn a good return on asset investment because they are managed more efficiently. Moreover, financially solvent firms perform better which affects the profitability positively. The study recommends that the general insurance companies of Bangladesh give due attention to these factors to improve their performance and profitability.

Key Words:

Correlated Panels, Corrected Standard Errors (PCSEs), General Insurance Companies, Panel Data.

ICT ACCESS FOR THE SMALLHOLDER FARMERS: ADOPTION AND STRATEGIES FOR RURAL AREAS OF BANGLADESH

Mohammad Anisur Rahman

Rabeya Sultana

Bushra Humayra Esha

ABSTRACT

Agriculture plays a vital role in the economy of Bangladesh. It is providing employment opportunity to over a half of the workforce and contributing as much as 13.41% of the national GDP. Yet, a significant portion of those who are involved in agriculture, both as producers and laborers, live near about the poverty line. One of the prime factors suppressing their economic growth is the poor rate of adoption of relevant information channelizes through ICT. This study aimed to explore prominent factors that are influencing the adoption of ICT based information services by smallholder farmers in rural Bangladesh through applying the unified theory of acceptance and use of technology (UTAUT) model. Data has been collected from 150 smallholder farmers from five different districts of Bangladesh. Data analysis revealed that performance expectancy, facilitating condition, effort expectancy, trust & security issues have a substantial influence on the intent to adopt ICT based services. Facilitating condition found to have both direct as well as the partially mediating effect on the adoption of ICT. However, effort expectancy and security & trust have a negative impact on the behavioral intention to adopt ICT by the smallholder farmers. This study uniquely identifies the factors of adoption of ICT based tools and services of the economically marginalized section of the society and the outcome of this study could help the policy makers to formulate policies for farmers to reap benefits from ICT usage.

Key Words:

Bangladesh, ICT Adoption in Agriculture, IT Policy, Smallholder Farmers, UTAUT.

PERFORMANCE APPRAISAL AND AFFECTIVE COMMITMENT – EXPLORING THE ROLE OF THE INTERACTIVE EFFECTS OF JUSTICE DIMENSIONS

Mohammad Moinul Haque

Sutapa Bhattacharjee

Yesmin Sultana

ABSTRACT

The purpose of this research is to explore the interactive effects of justice perception on the relationship between performance appraisal and affective commitment. Four types of justice were considered for this purpose. Data were collected from 628 employees of different organizations of Bangladesh using a self-administered questionnaire. Confirmatory Factor Analysis was used to validate the questionnaire and Structural Equation Modeling was used to analyze the data. The result revealed a positive and direct effect of fair performance rating on affective commitment. It also revealed a positive but indirect effect of fair performance evaluation procedure on affective commitment which is mediated by performance rating. Positive but indirect effects of fair informational aspect of performance evaluation procedure and fair interpersonal aspect of performance rating on affective commitment are also found. From results, it is inferred that fairness of performance rating is the most important factor to employees working in Bangladesh.

Key Words:

Achievement, Business Graduate, Employability, Job Attractiveness, Quality, Salary, Work Environment.

RELATIONSHIP BETWEEN MACROECONOMIC VARIABLES AND STOCK RETURN: AN EMPIRICAL STUDY ON DHAKA STOCK EXCHANGE

Md. Mohiuddin

Reefat Zaman Shourov

Fairuz Chowdhury

ABSTRACT

This study investigates the dynamic relationship among the stock market and macroeconomic variables for the stock market of Bangladesh. In this study, Cointegration Test, VECM, Granger Causality Test and the VAR Model have been used to determine the relationship. In the study, the macroeconomic variables that have been chosen are – GDP, CPI, Deposit Interest Rate, Broad Money Supply (M2), Industrial Production Index (IPI). DSE All Share Price Index has been taken to calculate the equity market return. The estimated results suggest that there may be a relationship between Equity Market Return and GDP in Bangladesh, but as a whole, there is no strong relationship between the macroeconomic variables and the equity market return. The variable IPI also shows a short-run impact over the equity market return, but in the long-run this effect gets nullified. Finally, it can be concluded through this study that in Bangladesh the equity maret does not have much informational efficiency. So, in line with Efficient Market hypothesis, the implication of the finding in this study suggests that a rational investor can earn above average abnormal return constantly in Dhaka Stock Market which is not possible in a market with strong form of efficiency.

Key Words:

Cointegration, CPI, DSE, Equity Market Return, GDP, Granger Causality Test, Interest Rate, IPI, Macroeconomic Variables, VAR, VECM.

A FRAMEWORK FOR MEASURING FIRM-LEVEL COMPETITIVENESS

Shakila Yasmin

Md. Mohiuddin 

ABSTRACT

Existing literature measuring firm-level competitiveness is diverging. Although many researchers proposed comprehensive measures of competitiveness which consist of financial and market performance measures and some measures of capability and resources; the existing practices do not provide any clear and/or objective direction regarding how to measure firm-level competitiveness. Therefore, the purpose of this study is to identify the gaps in the existing measures of firm-level competitiveness and propose a framework to measure firm competitiveness in an objective manner. The study is based on existing literature related to the issue. Outcome measures proposed in literature mostly used financial profitability ratios which are in fact absolute measures thereby problematic when comparing across companies and industries. Moreover, these measures represent only past performance and provide no estimation of consistency and future prospects of performance. Another measure commonly used to represent relative or market performance is market share. This may be misleading because in recent time of rivalry among firms, companies sometimes do sacrifice profitability for market share. Capability measures of competitiveness in existing literature proposes subjective evaluation of resources, capabilities and competencies. Such subjective measures are prone to respondent bias and require a lot of data to be collected by surveying companies in the industry. With an aim to address the above-mentioned issues, this study proposes three measures of business competitiveness: i) normalized value of profitability ii) persistency parameter a and b from the first order autoregressive process of the normalized profitability and iii) Tobin’s Q (as a proxy of resource intangibility).

Key Words:

Firm-Level Competitiveness, Normalized Profitability, Objective Measure, Persistency Parameter, Tobin’s Q.

DIGITAL MARKETING LANDSCAPE OF BANGLADESH

Md. Iftekharul Amin

Jubairul Islam Shaown

ABSTRACT

Difital Marketing industry size is approximately USD100 million in Bangladesh. The digital advertising spending as a percentage of total advertising budget is also increasing significantly. The digital share is expected to be more than 15% in the current year. This spread has caused the launching of products such as Bioscope, iFlix, Wowbox, Yonder Music and many more. Within only a few years, successful agencies such as Analyzen, Webable Digital, Magnito Digital, Asiatic Digital have made their mark. To gain firm position in the market, two firms have gone into a merger this which is also a first in this industry. To recognize the contribution made by this agencies, Digital Marketing award 2017 was held on a stand-alone basis for the very first time. Telecommunication and FMCG are the biggest clients of digital content. Media buying, strategy consultation and content development are the most demanded services from this sector. Even though the marketing is growing, there are major challenges. Low perceived value, lack of client and consumer education, lack of training facilities and absence of trade body or an association are few of them. If the challenges are addressed properly, the industry might grow in more robust manner, with more product innovations such as voice and video-based interface in Bengali, augmented reality, speech recognition services and automated customer management system. So far, any comprehensive study regarding this industry is unavailable. This study will work as a guide for the interested stakeholders and will help them to assess the potential of this industry and act accordingly to address growth.

Key Words:

AIT, Augmented Reality, Bottom of the Pyramid (BoP), Lead Generation Marketing, Media-Buying.

IMPACT OF BUDGET DEFICIT ON GROWTH: AN EMPIRICAL CASE STUDY ON BANGALDESH

ASM Shakil Haider

Md. Rezaul Kabir

Sabrinna Fatema Shaon

ABSTRACT

Large and persistent budget deficits can generate considerable concerns regarding economic growth and can cause an economic crisis. This research seeks to investigate the true impact of budget deficit on GDP growth. As employment rates, exchange rates, interest rates, and inflation also impact on GDP, these variables have also been considered along with the budget deficit as control variables. Quarterly data of the variables from the period 2000-2012 have been considered. Different statistical tests and models (i.e. Unit Root Test, VAR, Granger Causality) have been used to find out the impact of budget deficits on GDP growth. For short-run adjustment and co-integrating relation measurement, the Vector Error Correction (VEC) method was also used. Both VER and VAC models have been tested based on their stability tests. The research results suggest that co-integrating relationships between budget deficits, inflation and exchange rates, and a negative impact of budget deficit on GDP growth.

Key Words:

Budget Deficit, Economic Growth, Interest Rate, VAR, VECM.

JOB ATTRACTIVENESS VERSUS KEY EMPLOYABILITY FACTORS FOR FRESH BUSINESS GRADUATES IN THE PRIVATE SECTOR OF BANGLADESH

Muhammad Ziaulhaq Mamun 

ABSTRACT

This paper aims at determining the factors that influence business graduates’ job-attractiveness and their employability in private organizations of Bangladesh. A total number of 480 samples (240 job seekers and 240 employers) were taken from 20 private organizations from Dhaka city within which ten were local and the rest ten were multinational companies. The study identified 12 job attractiveness factors and 41 employability factors which were ranked based on the preferences of the respondents. Among the job attractiveness factors salary and working condition were found as the most important factors followed by average promotion period, availability of training programs and flexible working hours. On the other hand, regarding employability, the study identified 18 achievements based on factors such as academic institution, major area, business competition participation, internal and external club participation, preliminary test score, preliminary test analytical score, CGPA, personal interview score etc., and it also found 23 quality based employability factors having moderate to low correlation with job attractiveness. Only alumni strength was found to have a little strong correlation with job attractiveness, while internship, institutional image, transition skills, references, passion for the job were found to have moderate correlation. Variables like initiative, body language/gesture, attire and CV were weakly correlated with job attractiveness. A factor analysis was carried out to reduce the 23 quality-based employability variables into three factors: managerial capability, personal traits and alumni strength. Finally, a “job attractiveness versus employability factors” matrix noted that jobs with high score have high significant correlation with almost all the employability factors and jobs with low scores are correlated with fewer numbers of variables. Hence, the study concluded that the demanding jobs demand more qualitative employability factors.

Key Words:

Achievement, Business Graduate, Employability, Job Attractiveness, Quality, Salary, Work Environment.

RELATIONSHIP BETWEEN CAPITAL STRUCTURE AND FINANCIAL PERFORMANCE: EVIDENCE FROM THE PHARMACEUTICALS INDUSTRY OF BANGLADESH

A. T. M. Jakaria Khan

Sultana Sabina Chowdhury 

ABSTRACT

Choice of capital mix is an important decision that managers have to make as capital structure influences the financial performance of firms significantly. The purpose of this paper is to investigate the relationship between financial leverage and firm’s profitability of pharmaceutical sector in Bangladesh. This paper analyses data from 2011-2015 of the 20 pharmaceutical companies listed in Dhaka Stock Exchange. Data were collected from their annual reports and they were analyzed using descriptive statistics and correlation analysis. The results show that debt-equity ratio is moderately positively related with Return on Equity (ROE) and the relationship is statistically significant. Debt-equity ratio is negatively related to firm’s performance when measure using Return on Assets (ROA) and Net Profit Margin (NPM) but the relationships were found weak and statistically insignificant. The outcomes of this paper may give policy makers, government and financial managers some useful insights for managing capital structure prudently.

Key Words:

Capital Structure, Financial Leverage, Pharmaceutical Sector of Bangladesh, Profitability.

TRAVEL RISK ASSESSMENT OF BANGLADESHI MIGRANT WORKERS: PRESENT SCENARIO AND POSSIBLE SOLUTIONS

Sutapa Bhattacharjee 

ABSTRACT

As business have expanded globally, the importance of employee movement increases exponentially. The risk of working abroad on a short trip or as an expatriate has also been increased due to the volatile situation in terms of health, socio-political scenario and inherited travel uncertainties. Employer duty of care is already one of the most important areas that businesses are concerned about; travel risk assessment is key area of that concern. This study was done on the basis of the available previously done researches and available policies used by public sector. This article is an attempt to focus on the international standard of travel risk assessment and Bangladesh’s current scenario in that regard and recommends possible improvements to make the overall scenario better. This paper gives a guideline to make the scenario pro-employee and holds the employer more concern to achieve the sustainability of the business.

Key Words:

Bangladesh, Employer Duty of Care, Migrant Workers, Travel Risk Assessment.

UNDERSTANDING THE DETERMINANTS OF TECHNOLOGY DRIVEN SERVICES ADOPTION BY THE RURAL CONSUMERS IN BANGLADESH

Md. Khaled Amin

Ehsanul Huda Chowdhury

Mahmud Habib Zaman 

ABSTRACT

This study sought to ascertain the possible determinants that sway rural consumers’ behavioral intention to use technology driven services in Bangladesh. Using the self-administrated questionnaire followed by several in-depth interviews and focus group discussion (FGDs) as supporting instruments, this study analyzed information gathered from one hundred and three respondents, drawn purposively from a village locally known as Dollar Bazar, situated in Manikganj district of Bangladesh. All respondents were provided with the structured and self-administrated questionnaires and advised to quantify their responses in a 7-point Likert scale ranging from Strongly Disagree (SD) to Strongly Agree (SA). Questionnaire items were primarily adopted from prior studies, pertinent to Information Communication Technologies (ICTs) diffusion, adoption, and acceptance. Results of the study reveal that the three retained observed variables; service perception (SP), Perceived Interaction (PI), Intention to Use (ITU) have good degree of internal consistency. Moreover, confirmatory factor analysis (CFA) results brought out the facts that the variable, namely Perceived Interaction (PI) is significantly affecting the dependent variable while Service Perception (SP) has no significant effect on the intention to use which are quite consistent with the earlier estimates in this field. Findings of this study have theoretical contributions as it directly contributes by enhancing the outlook of the literature of technology adoption, and provide managerial implications for ICT driven organizations (i.e. Telecom Companies, Value Added Service [VAS] providers, Financial Institutions) by enhancing knowledge regarding the rural consumers of Bangladesh and their behavior.

Key Words:

Bangladesh, Information and Communication Technology (ICT), Intention to Use (ITU), Perceived Interaction (PI), Rural Consumer, Service Perception (SP), Technology Driven Services.

GENDER GAP IN F-COMMERCE ENTREPRENEURSHIP IN BANGLADESH

Md. Iftekharul Amin

Ayesha Sabrina 

ABSTRACT

Faced with unemployment challenges, the young population in Bangladesh has resorted to startups, tech enabled entrepreneurship in recent years. As one the fastest growing tech enabled business initiatives, F-commerce or Facebook enabled commerce is creating a buzz. Low investment requirement, better targeted marketing, increasing consumer interest in buying online, etc. support the high growth of F-commerce in Bangladesh. Although at its nascent stage, F-commerce, by eradicating most of the barriers faced by women entrepreneurs in developing countries, has the potential to empower them in the entrepreneurial ecosystem in Bangladesh and thus ensure more meaningful participation of women in business. This study attempts to unearth if F-commerce in Bangladesh does actually offer a level playing field for all the entrepreneurs irrespective of gender. Using firm’s gross revenue and owner’s income from the firm as parameters for gauging business performance, the study also looks into factors behind gender gap in F-commerce business in Bangladesh. Based on the expert opinion and interview of 30 Facebook entrepreneurs in Dhaka, Chittagong and Khulna, the study found that, despite their higher education, lack of business experience seems to be the main obstacle facing female F-commerce entrepreneurs which result in lower revenue generating, smaller and younger firms. The study also elaborates the F-commerce ecosystem in Bangladesh to identify possible areas and stakeholders for intervention. Based on qualitative and quantitative studies, a 3-pronged model has been recommended to address the key points behind the gender gap in F-commerce.

Key Words:

F-commerce, Gender Gap, Human Capital, Women Entrepreneurship.

MARKET COMPETITIVENESS OF THE BANKING INDUSTRY AND THE CONSTITUENT BANKS OF BANGLADESH: A STUDY ON THE BANKS LISTED IN DHAKA STOCK EXCHANGE

Jubairul Islam Shaown

Sutapa Bhattacharjee

A T M Jakaria Khan 

ABSTRACT

The banking industry of Bangladesh consisting of 57 schedules bans, makes an annual contribution of around 3% of total GDP. With the inclusion of new banks, the overall contribution of this sector towards GDP is increasing, but the individual banks are facing higher competition than before both in terms of borrowing and lending. As the ratio of the number of banks to the size of the economy is higher compared to that of other developing countries, it is now important for the depositors and investors to know the performance and competitiveness of individual banks as well as the whole industry in order to ensure good decision making regarding their investment. This paper aims to assess the market competitiveness of banking industry of Bangladesh using various bank-level panel data over the course of 2011 to 2015. In order to achieve the purpose of this paper, two specific models have been utilized. Market competitiveness of the banking industry of Bangladesh has been assessed using the ‘Hirschman-Herfindahl Index Model’. Inter-bank competitiveness has been analyzed using the ‘Boone Indicator Model’. The measurement of the competitiveness of the banking industry has been done based on the market share indices such as operating profit, funds under management, deposits, and size of loan portfolio. Lastly, comparative competitive position of the banks in the industry has been assessed using the operational efficiency indices such as net profit margin, return on assts, cost of deposit, net interest margin etc. the study finds the banking industry quite competitive, the comparative assessment of efficiency of the banks operating in Bangladesh suggests that although the overall industry efficiency has not improved, banks with a broader customer base and strategic upper hand enjoy a better operational efficiency.

Key Words:

Banking, Banking Industry of Bangladesh, Boone Indicator Model, HHI Model, Market Competitiveness, Market Share.

OBSTACLES TO CONTRIBUTORY PROVIDENT FUND IN THE PRIVATE SECTOR: BANGLADESH EXPERIENCE

Dhiman Chowdhury 

ABSTRACT

The paper finds that only Bangladesh in South Asia does not have a government mandatory provident fund in the private sector except in tea and newspaper industries. There are obstacles mainly government failures in the way of mandatory contributory provident fund in Bangladesh. Other South Asian countries, not to speak of developed countries, have mandatory regulation for contributory provident fund and gave seen some success. The lowest level of public provisions, social protection, and tax revenue on the one hand and the highest level of subsidies to the rich and wealthy are the main obstacles in the way of beginning contributory provident fund in this country. The paper concludes that any government regulation regarding provident fund, mandatory or voluntary, will not be of much use unless the government overcomes these obstacles at least at par with its neighbors’. The paper uses secondary data from the national and international sources.

Key Words:

Informal Sector, Provident Fund, Public Provisions.

STOCK PRICE REACTION TO BONUS ISSUE: EVIDENCE FROM BANGLADESH EQUITY MARKET

Reefat Zaman Shourov

Md. Mohiuddin

Ms. Yesmin Sultana 

ABSTRACT

Stock Dividend Announcement (Bonus Share Issue) is one of the most common phenomena in any capital market all over the world. Though theory suggests that there should not be any significant price reactions on the announcement of bonus share, many empirical studies have concluded with a very different tone. This study explains the behavior of share price in the Bangladesh Equity Market towards the bonus announcement issue by taking into account the price movements of the blue chip & junk stocks that announced bonus issue. The study aims to address the impact of the price behavior by comparing the stock performance with the performance of the market index with the purpose of comprehending whether the behavior of the Bangladesh equity market aligns or differs with other major global equity markets. The objectives of the study are to find out the impact of bonus issue on the price behavior of Blue Chip Scrips and Junk Scrips and to assess the nature and extent of scrip performance based on the size of the bonus issue, time period and category in relation to the market performance. To assess the stock price reactions to bonus issue in the Bangladesh equity market, various tests, including one sample t test, one same proportion z test, two sample t test, two sample PR test, have been applied in this study to verify various hypotheses aimed to the objective of the study. This study is done on two groups of securities – one is investable grade securities or the blue chips stocks (DS30 Stocks); the other being Junk Stocks (Z Category Scrips). A total of thirty (30) DS30 Scrips and forty-four (44) Juck Scrips (Z Category) had been traded in Dhaka Stock Exchange. The study covers the time period from 2008 to 2016 which includes a total of 264 bonus declaration events. To determine if the scrips are over-performing (or underperforming) the market, a proxy for the overall market was taken; the proxy taken for the overall market is DSE broad index. This study concludes that there is no significant impact of bonus declaration on the price behavior of the scrips, whether or not quality of the scrips has been considered, in Bangladeshi equity market. Another important finding of the study is that the time period factor affects the performance ratio of the scrips. The time period is mostly important for the junk scrips as the movement of the junk scrips is generally depends on the overall market trend. The study has also revealed that there is no significant impact on the price movement of shares in accordance with the size of the bonus issue in the Bangladeshi Equity market as observed in other major global equity markets.

Key Words:

Blue Chip Scrips, Bonus Issue, Dhaka Stock Exchange, DSE, Equity Market, Junk Scrips, Price Behavior, Junk Scrips, Price Behavior, Price Movement, Size, Stock Dividend.

TREND ADJUSTED EXPONENTIAL SMOOTHING FORECAST: EVIDENCE FROM A MULTINATIONAL COMPANY IN BANGLADESH

Abdul Hannan Chowdhury

Md. Rezaul Kabir 

ABSTRACT

This paper evaluates the predictive capability of several forecasting techniques to forecast the monthly sales volume of a multinational company in Bangladesh. A comparative analysis was performed using forecast accuracy and control measures. Randomness of residuals has been observed using normal probability plots, and an appropriate tracking signal test has been performed to find forecasts which are in control or out of control. It was found that double exponential smoothing provides the best predictive results.

Key Words:

Exponential Smoothing, Forecasting Technique, Uncertainty.

FACTORS AFFECTING AUDIT COMMITTEE EFFECTIVENESS IN AN EMERGING ECONOMY: EVIDENCE FROM BANGLADESH

Dr. Md. Mohiuddin 

ABSTRACT

This study empirically examines the key factors that currently affect audit committee effectiveness in listed companies in Bangladesh. The study is based on a comprehensive questionnaire survey along with 40 supplementary semi-structured interviews undertaken with different stakeholders, namely, audit committee chairpersons, company secretaries, finance directors and external auditors. Despite three out of the four groups in the study sample being insiders, the respondents revealed that audit committee effectiveness in Bangladesh is not at a desired level due to problems of composition, qualifications and general level of expertise of audit committee members. Interestingly, the independence of audit committees was called into question and frustrations expressed against the optional establishment of audit committees initiated by the Bangladesh Security and Exchange Commission in 2006. This study concludes that in order to improve the effectiveness of audit committees and enhance the overall corporate governance environment in Bangladesh the regulator should, as a matter of urgency, issue guidelines requiring: (1) mandatory practice of audit committees in companies; (2) stipulate minimum qualifications for audit committee members, and (3) the inclusion of majority audit committee members (including the chairman) form independent directors.

Key Words:

Audit Committees, Bangladesh, Corporate Governance, Effectiveness, Emerging Economies.

INSTITUTIONAL THEORY AND GENDERED ORGANIZATIONS:

A site for elucidation and deinstitutionalization of masculinity of organizations

Shakila Yasmin 

ABSTRACT

By analyzing feminist critiques of organizations and their proposed interventions from an Institutional Theory perspective this research has exposed the reasons for limited success in achieving gender equity in organizations. It argues that organizational and environmental level interventions are necessary but inadequate to change deeply held norms and beliefs in individual minds and are thereby insufficient for resulting consistent change in organizational praxis. To Achieve effective institutional change, this paper calls for institutional entrepreneurship at the individual level. In this respect, the paper has raised the issue of individuals taking agency to negotiate with the institutionalized gender norms in organizations. Further research needs for exploring ways to influence institutionalized beliefs and norms embedded in individual mind-sets has been discussed. Overall, this research offers a theoretical basis for negotiating against embedded gender perceptions among individuals for the success of the larger feminist project of deinstitutionalizing masculinity of organizations.

Key Words:

Institutional Theory, Gender, Organization

IS DHAKA STOCK MARKET LEADING CHITTAGONG STOCK MARKET? A TIME SERIES ANALYSIS

Sarkar Humayun Kabir

Abdullah M. Noman

Abu Taleb 

ABSTRACT

This paper attempts to explore the integration between two national stock markets, Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) in Bangladesh by applying time series analysis and using 1564 daily price observations of both DSE and CSE starting from January 3, 2005 to December 30, 2010. The study finds a statistically significant co-integrating relationship between DSE and CSE. This study further suggests that the Dhaka Stock Exchange is exogenous and Chittagong Stock Exchange is endogenous. In terms of causality, this study finds unidirectional causality between these two markets and surprisingly, causality is moving from Chittagong stock market to Dhaka stock market. In addition, existence of structural change has been detected in both stock markets due to 2008 global financial crisis.

Key Words: Market Integration, Co-Integration, Vector Error Correction Model (VECM), Variance Decomposition, Granger Causality, Structural Change, Financial Crisis

PRICE HIKE TRENDS IN THE REAL ESTATE SECTOR OF DHAKA CITY: AN ANALYSIS

Md. Iftekharul Amin

Mohammed Shafiul Alam Khan

Saiful Arefeen 

ABSTRACT

The study aims to measure the usage of bank loan or other credit schemes in the real estate sector of Dhaka city, total volume of bank loan by both developers and apartment buyers and to assess the price hike trends of land and apartments. The research findings show that bank loan facility is a major issue in making purchase decision of flats, plots, or building houses. But due to difficulties in getting bank loan, potential buyers will be unable to fulfill their housing needs in neat future. In line with the demand, the price of real estate properties is also rising very fast. Price hike of land and construction materials also add to the overall price hike. The price of land has been increasing at a very high rate after 1990. After 2000, the rise in land price became steeper. There is no effective control of the government over the price increase of land within Dhaka city. Increased land price has a direct impact on apartment price. Also, after 2005, price of bricks, granular sand, cement, grade 60 rod etc. underwent a rapid, almost exponential increase. Due to such phenomenal increase in land price as well as sharp increase in prices of the construction materials price increase of apartments became an obvious consequence. Rising population and increasing housing demand from 1991 to 2011, increase in the purchasing-power-parity (PPP) per capita GDP, foreign remittance growth and black money influence are the major drivers behind the land and apartment price hike. Although loan disbursement over the year has ups and downs but the price trends do not show the same behavior. Price trends tend to be usually upward.

Key Words:Real Estate, Loan Disbursement, Purchasing-Power-Parity (PPP), Remittance

THE ROLE OF BUSINESS SCHOOLS IN THE CURRENT BUSINESS CONTEXT

Ismat Rahman

Md. Rezaul Kabir 

ABSTRACT

This article made an attempt to discuss the role of business schools and business research in the current context. It has particularly tried to address the following questions – Why do business schools exist? Are business schools fulfilling the role that we think they should right now? Where does doctoral research fit in with the role of business schools? The paper has tried to reflect critically on the accusation of some practitioners on the irrelevance of business school’s academic agenda the paper concludes that there should be healthy degree of antagonism between the world of action. However, the segregation between theory and practice should not take away the control of setting ‘teaching and research’ agenda from the hands of academicians.